TSMC seeks up to $ 15 billion in U.S. government support for two fabs in Arizona

TSMC would like fifteen billion dollars in subsidy and tax rebates from the US government for the planned construction of two plants in the state of Arizona. However, the government would have a number of conditions for this support that are “unacceptable” for TSMC.

The company hopes to get $ 7 to $ 8 billion in tax rebates through the U.S. Chips Act, writes The Wall Street Journal based on sources. In addition, the company would like 6 to 7 billion dollars in subsidies. This money would be necessary because certain construction costs in the United States are many times higher than in Taiwan. TSMC founder Morris Chang previously said that it is at least fifty percent more expensive to make chips in Arizona than in Taiwan.

However, the US government would not give the aid without conditions. For example, chip companies that receive more than $ 150 million in subsidies are required to give part of their profits to the government if the profits made thanks to the subsidy are higher than expected. TSMC says it has concerns about the success of the Arizona chip factories if there is a “limit” on their profitability due to this condition. In addition, according to the sources, it would be difficult to calculate the profitability of the two plants. The US government says that this condition can be waived ” in exceptional circumstances.”

The second contentious condition is that the government would like far-reaching information about TSMC’s accounting and business operations. However, the chip manufacturer does not want this information, for example about its customers and production techniques, to come out. This information is important for the US government, to ensure that the grants are used ‘as promised’.

It is not clear whether the support of the United States for TSMC is necessary to be able to build the chip factories. One of the chip factories is already being built and should be ready next year. The second chip factory should be ready for chip production by 2026. TSMC itself is investing about forty billion dollars in the construction of the two plants.

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